That’s why, in 1983, Mr. Cook says he saw an opportunity in creating software programs that could help consumers more easily manage their finances. It’s also why he later recognized a need for tools that could allow small and midsize businesses to do the same. Intuit, maker of TurboTax and Quickbooks, is now a publicly traded company with 7,700 employees and $3.5 billion in annual sales.

The Wall Street Journal spoke with Mr. Cook about the Mountain View, Calif., company’s early struggles with financing and marketing, and how a good ad with a 1-800 number changed everything.

Edited interview excerpts:

WSJ: Before building Intuit, you worked at large firms like Procter & Gamble Co. and Bain & Co. What prompted you to leave Corporate America and start your own business?

Mr. Cook: My wife complained about doing the bills. It was a hassle. I had been trained at P&G to find a problem that everybody has and that you could solve with technology. And this struck me as a classic entrepreneurial opportunity. Nobody likes to pay bills. There were about 20-plus personal-finance software products already on the market. I hired a computer-science student at Stanford, who later became Intuit’s co-founder, and we tested the leading sellers. They were slow and a waste of time. So we built our first product, Quicken, totally differently than every other competitor.

WSJ: How much start-up capital did have to work with?

Mr. Cook: We raised between $500,000 and $600,000. It came from my savings and my retirement plan that I cashed out. I also borrowed money from my parents. Lines of credit were another big source of capital. The banks were lending to me and my wife as a couple, not the business. We tried venture capital and that failed. We talked to about two dozen venture-capital firms and they all shut us down. We did get two angels to invest, but they put in only $151,000, total.

WSJ: A lot of start-ups struggle in the beginning. What were those first few years like for Intuit?

Mr. Cook: They were terrible. We almost went under twice. We couldn’t get software stores to carry our product because we had no money for marketing. We had to give back the computers and furniture we rented and stop paying employees’ salaries.

WSJ: How did you get over that hurdle?

Mr. Cook: We found an alternate distribution channel. We sold the software to banks, and banks would resell it to their customers. That kept us alive for another year. Then that ran out of gas so we decided to try advertising in magazines. We had an ad agency do the first ad but that didn’t work. It didn’t generate sales to cover its costs. But then a friend taught me how to write a direct-response ad. It had a 1-800-number and it brought in orders that delivered profits.

WSJ: In 1992, Intuit began making accounting and tax software for businesses. What led the company down this path?

Mr. Cook: We built Quicken as a home product, but when we did a tracking study, we discovered that half of our [customers] used it in an office. Initially, we ignored the results because we didn’t believe it. Three or four years later, it bugged me that people were still answering this question [Where are you using Quicken: Home, office or both?] in an odd way. It was when we started calling those customers that we discovered what was going on. There was a giant unsolved problem that they faced. Every small business has to keep books, but most don’t understand debit and credit accounting. That’s why they were buying and using Quicken. So then we built the first accounting software with no accounting in it and we called it QuickBooks.

WSJ: Many of Intuit’s products are now Web-based and accessible via smartphones with apps like SnapTax. Is there a lesson here about adapting to whatever new platforms consumers are using the most?

Mr. Cook: The lesson is the power of small entrepreneurial teams. Big organizations get committed to the way things were. It’s the small team led by an entrepreneur that can invent the way things will be. So SnapTax was done by a team of initially two and then three people. Similarly, our online-payroll service was done by a small team. Each one solves a problem that nobody else has solved and that’s what keeps the company on the cutting edge of change, whether it’s on mobile phones or Web services.

WSJ: The U.S. job market has been stagnant for years. How has the weak economy affected Intuit’s hiring activities?

Mr. Cook: We stopped hiring in 2009 just to make sure which way things were going, but then we resumed hiring fairly soon thereafter. We’ve been increasing our work force for the past two years. We’re always hiring software engineers and data analysts. We just brought in a new CIO, a returning employee, and we just hired a head of corporate strategy. We’re particularly looking for people who have entrepreneurial talent.

WSJ: Many company founders move on after their businesses go public. But you’ve stayed with Intuit and are now chairman of its executive committee. How come?

Mr. Cook: Changing people’s lives and growing entrepreneurs is something I can do a lot more of here than elsewhere.

WSJ: What advice do you have for folks looking to follow in your footsteps?

One Response to For Intuit Co-Founder, the Numbers Add Up

Very good story and it makes a lot of sense. Small businesses can change their direction very quickly, and if they make good decisions, they can become very successful and profitable. Thanks for posting, I will have to share this.